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bdcny7927 writes "The U.S. federal government pays outside IT contractors nearly twice as much for computer engineering services as it pays its own computer engineers, and 1.5 times more for IT management work, according to a non-profit watchdog group. 'The study points out that IT specifically "is widely outsourced throughout the federal government because of the assumption that IT companies provide vastly superior skills and cost savings." The Project on Government Oversight says its salary comparisons prove that those cost savings are not being realized. However, the comparisons do not address any cost savings that might be achieved through the skills, processes or systems that private IT services companies might deliver. The POGO researchers say that the federal government itself does not know how much money overall it saves or wastes with its sourcing decisions and has no system for doing so.'"

Being able to point the finger of blame at an outside source has significant value.

And this is the primary motivation behind employing contractors in many places.
A slightly different rationale applies to taking on consultants. Their job is to figure out what you want to do, and then provide "outside expert opinion" that this is, in fact, the best strategy. They take the blame like contractors, but pocket the money anyway.

There is the fact you can politically blame them value.There is the fact that they can dropped at any particular time value.There is the fact that they don't need to pay for benefits value.There is the fact they can be pushed to part time value.There is the fact that they will keep your full time staff honest value.

You could argue that the public sector workers are accepting less pay in return for a more steady, in fact nearly guaranteed even in the long term, paycheck.

I also find it confusing: "[IT is] widely outsourced throughout the federal government because of the assumption that IT companies provide vastly superior skills and cost savings." Then they present their findings that contractors are paid more than public sector workers, then we get "However, the comparisons do not address any cost savings that might

I am a government employee. A software developer. I have been for 6 years, and I was private sectors for a couple of decades prior.

I have been on both sides of this specific issue

The best IT staff I have worked with is the government employees. The most mediocre and bad were private sector. I suspect it has to do with it being easier to get a private sector job.

The software built in house lasts, ans lasts, and lasts. Out sourced work always runs longer and over, always has issues, and never is really going until years after the 'final roll out'.

I get calls pretty regularly from people in the private sector offering me jobs. Not interviews, actually over the phone jobs. Usually someone who knows me from my past gets into management and they look me up. I could make 50% more.

I don't take the because I value time, a lot. I work hard for 40 hours, done in 4 10's. Then I go home. If they need me, I get OT or comp time. I spend a lot of time with my family. I have friends making 100-140K, but 80-100 hour weeks. I did that for years, and what for? making some one else rich.

This "inefficient and lazy government worker" statements have been disproven time, and time again.

Not with the kind of healthcare, pension and other benefits available in the public sector. Many employees of the government have a guaranteed pension rate, something that a private contractor has no way to get.

You get yourself in the door of a good Federal contract.....form a "S" corp and get on as a subcontractor. You bill out at anywhere from $65-$80/hr....and you're golden.

This will keep you comfortable in salary....it is enough to figure to take off about 3-4 weeks a year for vacation and sick leave. You get yourself set up with a high deductible medical insurance policy (like $1200) and you use this ONLY for emergencies (heart attack,etc), and with this you are eligible to set up a HSA (Health Savings Account) where you can stick back over $3K a year pre-tax.

As a 1099 contractor, you can write off all kinds of things, even mileage driving to the site daily if you have to drive...lots of perfectly legal deductibles.

A nice thing with the "S" corp, is that it can also save you a good deal of money on employment taxes, (SS and medicare). Do get a CPA for advice on this, but you can do something like:

Say you pay yourself a salary or about $40K through the company. You bill for $100K for the year.

You only have to pay SS and medicare on that $40K, the rest of the $60K falls through on your personal taxes at the end of the year (dividends or whatever you want to call them from the company) and you only pay normal state and federal income taxes on that portion.

About the only PITA, is the paperwork you need to do. YOu can get a service to handle your payroll if you want, but these days with electronic access, you can easily set up with your state and the feds and pay your taxes quarterly on the income portion. Just document stuff well, and it actually is a pretty nice way to go.

The HSA is something I like, and wish was more easily available..not just with high deductible plans. This isn't like the FSA's you get through your normal W2 employer, it isn't a "use it or lose it" type thing...it keeps building and building. At retirement, you can convert this to retirement funds. You can also invest from this account if you so wish...

When I was doing this...I had no problem paying for my routine meds and Dr. visits with my HSA money. Often when I'd tell the Dr. that I'd be paying...they'd give me at least a 15% discount right off the bat...

Unfortunately, the Feds have more and more, bastardized the contractor paradigm. They deal more and more exclusively with only the LARGE contract houses...and is harder these days to get a 1099 gig...the big houses want you on as a W2 employee.....and then, you get the worst of both worlds as far as job security and pay go. Even that still isn't horribly bad, but you lose all the freedom (no more fscking having to 'earn' vacation and sick leave hours....and all the tax breaks.

More difficult to find...but not impossible.

If nothing else, if you can get in on a Federal contracting IT program as a W2...get in, get some experience and foot in the door and meet people. Makes it much easier on the next gig...to get them to let you sub contract to them and go the 1099 route.

I've been working less than 1.5 year as an employee for a government agency. Then I left, but that short employment time granted me a 320$ monthly payment for 20 years after I reach 65 y/o. It's not that much because it is an amount in today's money, but it was just 1.5 years. In that same time to get the same pension as a private contractor I would need to save close to 1000$ a month, and it would also require Mr Market to give me a steady 8-9% return each year until I retire.

As a government employee I also had all kinds of health benefits, paid gym membership, many discounts on hotels, plane tickets and car rental, lower premium on house and car insurance, and more vacation that I needed; I also got a tax break because of the pension fund, and more tax breaks if I decided to apply for an optional group IRA, where the government would put money if I declined the gym membership. And no paperwork, I just had to sign on the dotted lines when they hired me.

As a contractor I now make more than twice the salary, I can put all kinds of stuff on my tax and shuffle things around to save a buck here and there, I can takes months of vacation whenever I want, but there is just no way that in the long run I'll have a better pension.

No, Federal Employees certaintly don't have a "Guaranteed Pension Rate",unless you consider $250 a month a solid pension with which to live on. Federal Employees have a 401K setup similar to the private sector (Thrift Savings Plan) - which comprises the bulk of thier retirement. Yes there is a pension, but it's typically under $1K per month, not to mention SS is factored in there - which most Feds will never see.

My brother works for an IT company contracted to the military. He does less than I do, and makes nearly 1.5x as much as a matter of -normal- pay. Every two years he gets sent out of country for 3 months, and he earns like 3x normal pay if it's a country with an active war.

His benefits are pretty decent, and he gets almost European levels of PTO.

I'm quite envious. I guess that's what a Top Secret SCI clearance will do for you.

Read the article again and you'll see that they compared the BILLING RATE for contractors. The people doing the work don't get that. Usually 30%+ is taken off the top by the contract house/management company.

Nor did they account for the benefits costs. The true cost of the employee should be salary plus benefits.

I say this as someone who not only has worked both sides of that fence, but is currently hiring for Federal IT (InfoSec) positions. I've seen an average of 100+ applicants for each position advertised and most are contractors desperate to become full-time Feds.

I say this as someone who not only has worked both sides of that fence, but is currently hiring for Federal IT (InfoSec) positions. I've seen an average of 100+ applicants for each position advertised and most are contractors desperate to become full-time Feds.

One reason for this is, that the contracting paradigm is no longer what it was before.

I'd posted earlier...the Feds, more and more...are only hiring contractors through large contracting houses. These contracting houses, hire people as W2 employees...they get the worst of both worlds. Sure they get benefits, health, etc....but they really lose out on what balances out the contracting life. In a normal contracting life, you get a very high bill rate. From this, you pay yourself, your vacation/sick time, etc. It makes up for the level of 'job security' that you have to put up with in being a contractor.

When you are a W2 employee of the contracting house....you don't get that high pay, but you still only have the job stability of the regular contractor....and you aren't really treated as a real 'employee' by anyone.

But, as I'd mentioned before...if you can get in to the contractor world, even as W2 for awhile, it can lead you to being able to get into a subcontractor role yourself, and do the 1099 gig.

But those are harder to find....so, with that being the case, yes...jumping over to the Federal side, for what can be a lifetime job, isn't a bad thing to look into...I've looked into it myself.

It helps if you've worked in the fed contracting world for awhile for that jump too....you get in good with those working in fed IT programs, they can help pull strings to get you in. And if you've been doing federal IT stuff, likely as not, you already have clearances, which also help grease the skids to jumping to the govt. side of things.

If you're getting a bit older, and have made some good money....jumping over to the govt. side isn't a bad thing, for the job security and extra benefits, along with 'decent' pay. It isn't contractor pay by a long shot in most cases....but it is much more secure.

Exactly. The contractor gets paid twice as much, not the employees. In fact, profit motivations of the contractor put pressure on them to pay their employees as little as possible, and since most contracts are written in such a way as to absolve the contractor of responsibility [nytimes.com] if projects fail, the easiest way to maximize profit is to hire unqualified staff.

This is my firsthand experience. I was government contractor for 10 years. They hired me because I wasn't very qualified to write software (this was on

Right. I think the contractor's employee gets paid about one third of the billing rate. The rest of the money goes to paying for office space, taxes, support people (managers, accountants, secretaries), company profit, training, etc. Hiring contractors gives the government a lot of flexibility. If they need a system that uses technology X, they can hire a contractor with the relevant experience for the project, and when the project is over, the contractor

The amount of administrative red tape to hire a "permanent" employee is immense. In government, this is tantamount to a lifetime offer of employment, so it is not to be undertaken lightly. Management needs to be sure there is a lifetime of work for the position and the candidate has to be a good long-term investment risk.

With a lot less red tape, it is possible to scrape some budget money together THIS YEAR to hire a contractor. And it's not all that hard to get this year's money carried over to next yea

It also doesn't hurt that outside contractors don't get nearly the same benefits or protections that government employees do.

What benefits and protections did you have in mind? I've been one of those government contractors, and my brother is a systems programmer for NOAA. We've compared pay and benefits. I make a good bit more than he does. We pay about the same amount for health insurance for comparable plans. We get about the same number of days off. He has more legal holidays but I get more vacation days that I can take when I want or take as half days. I get a better pension. Our 401k plans are comparable. I'm not sure

What benefits and protections did you have in mind? I've been one of those government contractors, and my brother is a systems programmer for NOAA. We've compared pay and benefits. I make a good bit more than he does. We pay about the same amount for health insurance for comparable plans. We get about the same number of days off. He has more legal holidays but I get more vacation days that I can take when I want or take as half days. I get a better pension. Our 401k plans are comparable. I'm not sure who ha

It also doesn't hurt that outside contractors don't get nearly the same benefits or protections that government employees do.

And it really doesn't hurt that an outside contracting firm can make a fat campaign contribution.

Funny, but it's actually pretty hard to find an example where the outsourcing or privatization of any government service actually turned out to be more efficient and less expensive than just having the government do the job.

And, as Chile learned, that goes double for privatized social security. The administrative costs went from about 2% when the government ran their social security to almost 20% when it was privatized. They are now trying to end privatization of social security in Chile and put it back in the government's hands for just that reason. Yet, it doesn't stop a certain group of candidates who were debating last night to win the nomination for the US presidency from holding up Chile's privatized social security as a success story.

For one you are not part of the Bureaucratic System. So you can go talk to whatever level you need too, vs going up the chain. Secondly you are hired for performance, you can make those little mistakes that could hurt a full time employee.

Not in all cases. Your contract may attach you to a specific spot in the org chart. You'll still be serving a particular bureaucratic master. You'll have to honor his ulterior motives and unstated plans, carry his water and fight his battles, or you'll discover you're more expendable than a "civil servant" with tenure and some collective bargaining leverage.

This is particularly the case of contractors hired by OMB Circular A-76 provisions, which are often executed as headcount-by-headcount replacement of sa

More efficient != cheaper. In fact, it is usually the opposite. Car analogy: more fuel efficient cars are (usually) more expensive. More power efficient computers: more expensive. Better workers: more expensive. It may well be they pay twice as much for a contractor, who performs twice as much work as an inhouse employee.

Or it might not. However, being supplied with one small piece of information doesn't give the whole picture or determine whether private or public sector employees are more efficient. Coul

Conveniently, we have plenty of shrill talking heads telling us that the private sector is always more efficient.

That is the biggest lie I saw perpetrated in government contracting. That the private sector could always do a job cheaper. Big, fat lie in most cases. What it did do is keep the number of government workers artificially low while lining the pockets of campaign contributors running the outsource contractors (I'm looking at you CACI).

Conveniently, we have plenty of shrill talking heads telling us that the private sector is always more efficient. That should be a viable substitute for so called "empirical evidence".

Not really. The article admits that skill levels are not factored into the comparison. The article mentions that the outside contractors may possess superior skill levels and be better trained and that there may be savings related to having more capable people running and implementing a project. I'm not claiming this is necessarily the case, I'm just saying the it is premature to make claims as to whether money is being well spent or wasted. I know some very highly skilled people who work in a government IT

Do you have any first-hand experience with this? Because I do, and in my experience the contractors are pampered telecommuters who only physically pop in a few times per week.

In fact we had a big issue a few years back where we had to replace a bunch of contractors with full-time government workers because they are that much more expensive and an accountability nightmare.

And since I've already stated where I work, I was one of the people who replaced a contractor. I take in somewhere between a third and a half of what the contractor did and you bet your ass I get more done as a full-time employee, even on just the 1 or 2 duties that the contractor had vs. the many more I also have now.

Plenty. In Spain, but I think it's safe to consider this a rather general thing.
And to be honest, with the amount of public workers around here (3 million, total population around 45), there just shouldn't be any contractors, well paid or not.

Honestly I feel like this is as much a problem as anything else. In my experience, contractors sort of lack "buy in". They have no skin in the game, so to speak. It's a little too easy for them to walk away without having really fixed your problem, and if anything it often ends up being in their interest to do a crappy job, because then you have to pay them to come back and fix everything that broke.

I'm a cubicle drone doing nothing military-related. We're all just sharing anecdotes, which is fine as long as we label them as such rather than making sweeping (and Reaganesque) statements like the GP did.

Sure I knew people who were discharged, but in my 20 years of federal service, 8 as a Marine and another 12 as a DOD contractor, I haven't known a single civilian government employee who's been fired. I have known of at least 2 who weren't allowed to have computers though because they were found downloading porn at work. The agency had to make "accommodations" for their "illness".

Oh, and I call BS on your same day dismissal. Didn't happen. Maybe a student aid, a summer hire, or possibly a CO-OP employee, b

Sorry, I've worked both sides of this fence, and you should have stopped before you even typed the first word.

The contractors for the fed/military/etc do not work day to day, twice the hours or have triple the productivity.

They are given year+ long contracts, work the same hours, and have the same or less productivity. The perms face the exact same thing, their entire division can be wiped away with the stroke of a budgeting pen.

We are not talking about day labors here, all federal contracts are long and well defined. While your project may get canceled with the next _YEARLY_ budget, the odds of it suddenly going under are next to 0.

As a fed contractor, I never put in more than 40 hours a week. That is what we had in the budget, and to do more than that would have resulted in issues. The "cost+" contracts that would let me work 80 hour weeks and have the contracting agency get paid for it are few and far in between. Most are fixed at the rates and the number of hours, it does them no good to have you work more than your scheduled rate.

The productivity thing is pure bullshit. I've seen incompetent admins on both sides, but most are on the contracting side because the contracting firm wants to keep a larger % of the cut to themselves, and thus toss inexperienced newbies into the slot in the hopes that nobody will notice. The real kicker is that as a contractor you have an incentive to not really fix things, but to just patch them. After all, why fix something once and for all when your job depends on the customer needing to have you around to constantly fix something?

You seem to be confused, a 1 year contract for Lockheed, Northrup, etc... isn't a 1 year contract for the employee. The company the contractor works for can replace them any time they want without cause. Oh, and let's not forget the 4 weeks paid VACA and other benefits gov't employees get that contractors don't.

Disclaimer: I'm a government contractor who's salaried and I'm expected however many hours a week it takes to get my job done without overtime pay. Sometimes that's less than 40, but my average is

I too have worked both sides of the fence. As a contractor I feel more obliged to do things properly, and I am rewarded by being respected on the team I'm on and being one of the "go to" people for the rest of the team. On top of that, by doing things properly I'm keeping myself on my toes and improving my skills. What is the point in muddling through and just bodging everything? I'd go insane if I worked like that...

Having worked in education, dot.com startups (during the boom and bust years), federal (DoD) and now Local government, I have found that the desire to "do things properly'"is not a trait of the type of job (contract, perm, etc), it is a trait of the individual.

People having life time jobs make less than people willing to work on a day-by-day basis, with twice the hours, triple the productivity, working in any location the job requires? Really?

You have no idea what you're talking about. None. Permanent federal and state employees invariably work harder, and produce more, for less money, than contractors brought in from a consulting firm whose CEO happens to be some senator's brother-in-law.

People having life time jobs make less than people willing to work on a day-by-day basis, with twice the hours, triple the productivity, working in any location the job requires? Really?

Having spent some years working on federal contracts, I can't say that I've noticed a real difference between government programmers and contractors in terms of productivity per hour and quality of work. I used to put in more hours than the government employees, but after a certain number of hours your productivity and quality falls off. Fifty percent more hours does not equal fifty percent more productivity. Sometimes it just means more bugs that get caught in test or corrections after the code reviews ar

Temporary workers always make more money per hour than those doing it full time, its the trade off for the convience of having an on demand workforce.
It's also very misleading to go strictly off per hour wage when your not including the total compansation package into the mix. Full-time employees will get PTO, insurance, 401k/pensions, etc. That isn't a small chunk of change.

If they are in the employ of the contractor (General Dynamics IT), then even though the government might be paying them twice as much per hour, they're not getting paid twice as much per hour since General Dynamics IT is pocketing a significant percentage of the money.

Actually they factored in the extra 40% cost of benefits on top of the government employees salaries and the private contractors were still 1.5-2 times more expensive. The people doing this study weren't so dumb as to not factor that in:

Because the contractor billing rates published by GSA include not only salaries but also other costs including benefits contractors provide their employees,[66] POGO added OPM’s 36.25 percent benefit rate to federal employee salaries[67] and BLS’s 33.5 percent loading to private sector employee salaries to reflect the full fringe benefit package paid to full-time employees in service-providing organizations that employ 500 or more workers.[68] All supporting data for this study are found in Table 1 and Appendices B through D.[69]

That actually isn't that bad, given that the cost of an employee is way more than what their salary is (sick time, vacation time, health insurance, retirement, other benefits, etc.) all add up.

I'd be more concerned if it was 5-6x as much. 2x is a relative steal.

At the same time, if the feds only need someone for a few months for a specific project, it's a lot cheaper to bring in a consultant for the time needed than hire someone and have them working for you way too long.

Also I'm not sure how they compare the two unless it was by title only which may not be the best comparison. One friend of mine was working as a contractor with a government DBA. My friend wouldn't call himself a DBA but has extensive experience working with databases even on the administration side. Designing a new table, my friend could not convince the DBA to use an integer key for state. Instead the DBA was going to use text and index that instead. The reason: The DBA didn't want to write the join

Pretty sure they factored that it and still found them to be more expensive.

Actually they factored in the extra 40% cost of benefits on top of the government employees salaries and the private contractors were still 1.5-2 times more expensive. The people doing this study weren't so dumb as to not factor that in:
Because the contractor billing rates published by GSA include not only salaries but also other costs including benefits contractors provide their employees,[66] POGO added OPM’s 36.25 percent benefit rate to federal employee salaries[67] and BLS’s 33.5 percent loading to private sector employee salaries to reflect the full fringe benefit package paid to full-time employees in service-providing organizations that employ 500 or more workers.[68] All supporting data for this study are found in Table 1 and Appendices B through D.[69]

As someone who went from being a contractor to a civil servant, in a workplace with about a 50:50 mix with 400+ workers I think I can speak to this.

The first year I worked as a contractor I had in my possession a piece of paper I was undoubtedly not supposed to have. It listed all the pertinent details of the contract slot including the $ amount the government was paying for it, $154K. My salary was under 40% of that. Now in this job everything was furnished by the government including equipment and workspa

I am guessing that in about half these cases, at the individual level, the contractors are former government employees who weren't getting paid their fair market value by the public sector. Given that a good IT worker is worth about 5 times a medioce one and 20 times a bad one, they're probably a much better value, on average, than those "left behind". Consulting budgets and the like also let huge bureaucracies get necessary work done that is internally impossible because it is "not in the budget".

The other half these cases, I am also guessing, will prove to be unnecessary wastes of money even worse than typical government IT initiatives.

A friend of mine consults for DC public schools. Yes he does make quite a bit but it isn't actually a story about him, he at least delivers for his money.

So they want him to write a bigass database processing script. It will get fed data from a bunch of sources, including a web interface for users, and have to process it and store it in a Quickbase (Intuit's online database service). No problem, this is what he does best. So they've laid out for him what they require, he lays out for t

I don't make as much as a Highly Paid Consultant, either, but fuck off! This should be considered normal. Do you think the zillions of perks you get as an employee for the government (health insurance, unions, more holiday time, guaranteed pay raises) are free?

POGO's report [pogo.org] is freely available on the web. If you actually look at their methodology, you'll see that they included benefits.

Because the contractor billing rates published by GSA include not only salaries but also other costs including benefits contractors provide their employees,[66] POGO added OPMâ(TM)s 36.25 percent benefit rate to federal employee salaries[67] and BLSâ(TM)s 33.5 percent loading to private sector employee salaries to reflect the full fringe benefit package paid to full-time employees in service-providing organizations that employ 500 or more workers

...and I work for a state govt. I have to cover all my insurance costs, all the SS and other mandatory deductions, plus vacation and other paid time off. Some states are trying to mandate paid vacations and health insurance - even for baby sitters. This raises the costs considerably. PLUS - we are actually accountable: if we don't perform up to spec, we can lose money. A govt employee, esp. a federal employee has (in essence) a sinecure.

And before some people claim BS on some of this there was a recent dust-up here in Minnesota over our current governor's executive order to allow in home private daycare workers to unionize [publicradio.org]. Now granted this won't exactly be a state mandate for benefits and other things it is a possible mandate for all daycare workers to be part of a union. I say possible as the executive order hasn't been issued and no one know what is in it so it may just republicans making hay.

I have to cover all my insurance costs, all the SS and other mandatory deductions, plus vacation and other paid time off.

Well, you *did* take under consideration these payments (vacation, sick time, insurance) when you negotiated your bill rate, right?

Also, I hope you incorporated yourself, and did something like a "S" corp, which will allow you to save money on the SS and medicare....so that you don't have to pay those taxes on everything your company bills for and brings in....???

In fact, contractors who work on-site (as most do for the gov't), incur the same costs as gov't in-house staff do for facilities, admin costs, training, etc. In practice, the only savings due to outsourcing are health care and retirement, and outside of the military, these account for nowhere near 50% of an in-house gov't staff salary.

It's not about what the people make, it's about what the people cost. Remember that when the government hires a contractor, there is usually a contracting company. The company gets a lot more money per employee than the employee sees. Some of that is fair per-employee costs such as payroll taxes and employer-funded health care. Some of that is overhead -- the company's HR, payroll, accounting, contract offices, and profits come out of charging more per-employee.

I know lots of people in federal IT contracting. NOBODY makes that kind of money. I call B.S. on this whole article.

You just don't know the right people. When I was working on a government contract, I was billed at $220/hr. Of course, I only got a fraction of that in salary. But still to the point, there are contractors and contracting companies billing the government at rates that would get them to $268,000/yr.

You can't just compare a consultants rate to an employees salary. The government is paying for the employee's health care, pension, etc. As an independent consultant I have to pay for all that out of my rate. Additionally I have to carry Errors & Omissions Insurance, General Liability, Workman's Comp and several other things that are just the cost of doing business. A one-to-one comparison is very misleading.

Yes, you can't which is why they factored in benefits and everything else into the salaries they quote for government workers.

Because the contractor billing rates published by GSA include not only salaries but also other costs including benefits contractors provide their employees,[66] POGO added OPM’s 36.25 percent benefit rate to federal employee salaries[67] and BLS’s 33.5 percent loading to private sector employee salaries to reflect the full fringe benefit package paid to full-time employees in service-providing organizations that employ 500 or more workers.[68] All supporting data for this study are found in Table 1 and Appendices B through D.[69]

private corporations routinely pay IT contractors more than their own IT workers for the privilege of
being able to quickly hire and fire anyone they like without the cumbersome and frustrating effort of dealing with health, dental and life insurance as well as 401k and
training/certification benefits. Thats right, the art of oursourcing is also a clever means of engineering around your inherent value as a human being. Much the same as "benefits" are a delightful means of ensuring corporations never pay t

Actually it was at least initially part of the smaller government initiative back in the 90's. All the IT folks had to be contractors. No government IT folks. Our first couple of contracts were so badly written that servers didn't get updated. If a server broke, the government paid to replace it. But if it got old, the contractor pays for a replacement. So as long as we could keep it going, it wouldn't cost the contractor anything.

The article seems to be changing terms. At first it talks about total compensation, which to some degree might be comparable. If the total compensation of a contractor is significantly greater than the total compensation of the fully funded employee, then that might be a problem. However later in the article it talks of pay of the contractor, pay of the federal employee, and salary of the private sector. This of course is silly. The cost of an employee is far greater than the salary. There is pension,

Because the contractor billing rates published by GSA include not only salaries but also other costs including benefits contractors provide their employees,[66] POGO added OPM’s 36.25 percent benefit rate to federal employee salaries[67] and BLS’s 33.5 percent loading to private sector employee salaries to reflect the full fringe benefit package paid to full-time employees in service-providing organizations that employ 500 or more workers.[68] All supporting data for this study are found in Table 1 and Appendices B through D.[69]

Straight from the study where they outline their methodology. So even with a 36.25% benefit rate added to their salaries these contractors were still nearly 2 times more expensive.

GOVERNMENT IT WORKERS PAID LESS THAN SAME WORKERS IN PRIVATE SECTORObama claims government tightening beltPRIVATE SECTOR CONTRACTORS BILKING THE USSenate hearings commence in two weeksGOVERNMENT UNIONS KEEPING COSTS DOWNUnion leaders praised for austerityGOVERNMENT UNION WORKERS FORCED TO WORK FOR LESS THAN PRIVATE SECTORBill O'Reily attacks unions for not protecting worker's rights

Here's what I think the 'real' spin should be:WORKERS AT DIFFERENT COMPANIES PAID DIFFERENTLYFilm at el

In the information technology category, POGO found that the federal government is paying contractors to provide computer engineers an average of $268,653 per year. That's nearly twice the average $136,456 it pays its own computer engineers and nearly twice the average private sector salary of $131,415.

$268k is the combined invoice for the employee; $136k is the actual compensation of the GS14 or GS15 in question. Government contractor employees, unlike government employees, often work unpaid overtime for th

This has been a racket perpetrated since at least the Reagan administration, if not the beginning of time. Politicians make a big noise about how they are cutting government spending and gaining the efficiencies of the private market, by replacing civil servants with contractors. The contractors are much more expensive, which makes the companies hiring them a lot of money, some of which they use to lobby the politicians for more outsourcing. Politicians get campaign con

i suspect the same set of concerns applies to a lot of outsourced commercial IT.

But there's a lot of contracting overhead between the agency and the actual guy/gal doing the work. Add to that the substantial overhead costs for compliance to all the Federal Acquisition Regulations (FARs). Within the Government, there are major problems attracting -and retaining- talent; the Government trains them and if they're good, they go get much better paying/much better working conditions jobs in industry. The truly

I wonder if the salary comparisons were all in costs of the federal employee - which I doubt because then you're at at a GS11/12 step 5 or so position for the quoted numbers, assuming a 1.5x salary multiplier to account for benefits. A 14 step 9 in DC already makes 133K per the salary table - so an all in cost would be around 200K minimum.

What contractors bring is the ability to change the staffing levels quickly. Unlike federal employees, who after a year, are very hard to let go; a contractor can be ter

We don't have to pay for contractors' insurance and benefits (and probably neither do the contractors, who might farm out some work to their own contractors). At this rate, whether public or private, the retirement plans for *actual* workers look more and more like the Soylent Green screen play. Or maybe Mad Max.

I bet they're comparing contractor total cost to government employee salary.

Oh, look, there it is:

To make its cost comparisons, POGO used the General Services Administration's listed contractor billing rates alongside data from the Office of Personnel Management and the Bureau of Labor Statistics. The researchers point out that its government salary data does not incorporate overhead costs—management and administration, supplies, facilities—that private outsourcing f

I have spent some time working on government contracts where I was one of many contractors sitting at the client location full time. Part of the reason that particular agency used contractors was because their HR process was very difficult to deal with. It was very hard to hire new full time employees and it was almost impossible to fire anyone. The director knew he was paying more for the contractors, but he also knew he could quickly alter his workforce if his budget changed.

I was under the impression that you outsource to SAVE money. My perception is changed.

Outsourcing reduces headcount. It does not necessarily reduce actual cost or improve quality or timeliness. Many of us could cite counterexamples, where outsourcing increased costs and/or reduced quality and/or led to delays. From the CEO's point of view (which comes largely from market silliness), the effect of outsourcing on total costs or achieved output is much less relevant than its impact on the fixed cost part of total costs, and supposedly[*] gives greater flexibility in dropping costs should busin

> the government employees are paid twice as much as the skills and experience warrant

I completely agree. One time I had to deploy a web application (COTS) in a government agency, and I had to show the ropes to the tech lead in charge of the web development team that was supposed to take over the maintenance. After the webapp was installed, the guy kept asking me to "install in the intranet"; I showed him that it was accessible from a browser on the internal network but he kept asking for this to be inst

No, actually they aren't. If you had bothered to read their methodology on their study you would know this:

Because the contractor billing rates published by GSA include not only salaries but also other costs including benefits contractors provide their employees,[66] POGO added OPM’s 36.25 percent benefit rate to federal employee salaries[67] and BLS’s 33.5 percent loading to private sector employee salaries to reflect the full fringe benefit package paid to full-time employees in service-providing organizations that employ 500 or more workers.[68] All supporting data for this study are found in Table 1 and Appendices B through D.[69]

For the most part, often. According to the data Capers Jones has presented, contracted software work will be produced at about twice the rate of in-house work. It's not always true and it doesn't mean a company could run on only external workers. There is the domain knowledge aspect that pretty much requires in-house nurturing, otherwise the job could probably be handled by off the shelf software.

I have left and got better pay other places. To be honest also I miss the perm folks, but the talented contractors tend to always move to greener pastures one we realize that the companies are not going to treat us well once we move over.

Best thing I ever did ? - become a contractorWorst thing I ever did ? - become a contractor

I'd like a slot but to be honest, all the perks they give I don't see in my pay check and when I have to pay taxes on it I end up making less